Is the Amazon Effect Overrated?

Amazon Box 426If Amazon is, indeed, taking over the ecommerce world, then operations and fulfillment professionals are the last to know. According to the results of MCM Outlook 2014, 28.8% of respondents have seen no effect from Amazon on their business.

However, 36% of respondents said Amazon has had an effect on their shipping offers. Nearly a quarter of respondents (23.2%) said they feel the pressure to offer free shipping and 12.8% said there is pressure to ship orders faster.

Meanwhile, 45.4% of respondents told Multichannel Merchant that they are not using Amazon for anything at all, and just 2.8% of respondents said they are using Fulfillment by Amazon (FBA).

Despite these eye-opening numbers, Amazon is putting a dent into the direct-to-customer businesses.

“I believe Amazon has had a major effect on all ecommerce sites,” says Chris Brenner, vice president of PetSolutions. “They are definitely the toughest competitor on the Internet. Fast and free shipping is just something customers expect these days.”

Brenner thinks Amazon will have an even bigger impact on ecommerce in 2014. He has noticed Amazon increasing prices and dropping unprofitable SKUs. Brenner thinks this is the year Amazon will try to turn a reasonable profit.

“In the long term, if [B2B marketplace] Amazon Supply attacks our business model, then it will hurt us much more,” says S&S Worldwide director of distribution Mark Desrosiers.

Desrosiers says S&S Worldwide does partner with companies like Amazon, and has doubled its business there between 2012 and 2013. Though they are not using Fulfillment by Amazon, they are considering it for certain product selections.

Brenner, however, has no plans to use FBA. “I believe this is just another way for Amazon to gain product knowledge that can be used against other retailers,” Brenner says.

Multichannel Merchant’s MCM Outlook 2014 survey was fielded from Feb. 10 to March 10, 2014 and drew 1,281 respondents. Of those respondents, 470 identified themselves as a merchant or a retailer.

The full MCM Outlook 2014 report on Operations and Fulfillment will be released in conjunction with Multichannel Merchant’s Operations Summit, which will be held Apr. 22 to 24 in Indianapolis.

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